Yahoo Finance Rainbows and Unicorns: Arvida Group Limited (NZSE:ARV) Analysts Just Became A Lot More Optimistic
Celebrations may be in order for Arvida Group Limited (NZSE:ARV) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.
Following the upgrade, the latest consensus from Arvida Group's two analysts is for revenues of NZ$200m in 2021, which would reflect a major 22% improvement in sales compared to the last 12 months. Statutory earnings per share are supposed to decrease 8.3% to NZ$0.077 in the same period. Previously, the analysts had been modelling revenues of NZ$178m and earnings per share (EPS) of NZ$0.046 in 2021. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.
Check out our latest analysis for Arvida Group
Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of NZ$1.63, suggesting that the forecast performance does not have a long term impact on the company's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Arvida Group at NZ$1.90 per share, while the most bearish prices it at NZ$1.35. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Arvida Group'shistorical trends, as next year's 22% revenue growth is roughly in line with 24% annual revenue growth over the past five years. Compare this with the wider industry, which analyst estimates (in aggregate) suggest will see revenues grow 11% next year. So although Arvida Group is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
The Bottom Line
The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Some investors might be disappointed to see that the price target is unchanged, but we feel that improving fundamentals are usually a positive - assuming these forecasts are met! So Arvida Group could be a good candidate for more research.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Arvida Group going out as far as 2023, and you can see them free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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